[15.11.2004]
Alphameric Plc (“Alphameric”
or “the Group”) PROPOSED
DISPOSAL OF THE RETAIL BUSINESS
Background to and reasons for the
Disposal
The Board
has conducted a comprehensive review
of the Group’s strategy. At
present the Group operates three lines
of business: Leisure, Retail and Hospitality.
The strengths, weaknesses and present
performance of each line of business
have been considered. Most importantly
the Board has critically reviewed
how the Group might best maximise
shareholder value through an objective
and rigorous appraisal of the opportunities
and challenges for superior growth
in both revenues and profits that
exist in the markets addressed by
each line of business. The Board is
of the view that a key criterion for
achieving superior growth is whether
each line of business has either achieved
or can realistically achieve a leading
position in the market sector in which
it operates. This review has led the
Board to the conclusion that both
our Hospitality and Leisure businesses
are trading well, making significant
progress and fully meet the criterion.
Both represent a real opportunity
to maintain or achieve a leading position
in their chosen marketplaces.
In the
Interim Report published on the 6
July 2004 the Board explained that
actions were being taken to strengthen
the management, reduce the overheads
and enhance the market profile of
the Retail Business. Although good
progress has been made, it is the
Board’s view that success in
this market requires scale at a level
that the Retail Business is unlikely
to achieve organically. The Board
reviewed the possibilities of gaining
scale through appropriate acquisitions,
but after careful consideration it
became clear that in the current and
reasonably foreseeable market conditions
the costs and risks associated with
such a plan would be unacceptable.
Since
the Board has concluded that the Retail
Business cannot meet the criterion
for superior growth it has decided
that Shareholder interests would be
best served through a disposal of
the Retail Business.
A
crucial further consideration is that
increased investments in the Leisure
and Hospitality, businesses should
achieve superior returns at lower
risk.
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